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Bargaining Theory, Inflation, and Cyclical Strike Activity in Manufacturing

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  • Bruce E. Kaufman

Abstract

This paper presents a theoretical and empirical analysis of cyclical movements in strike activity. The first part of the paper develops a bargaining model that demonstrates the crucial role of limited information as a cause of strikes. This model is believed to be an improvement over others because it allows for maximizing behavior on the part of both the union and the firm and it explicitly incorporates the interdependency that exists between the concessions of one side and the demands of the other. The second part of the paper uses this model to show how inflation may cause a systematic cyclical movement in strike activity. This analysis is developed for both the case of rational price expectations and that of adaptive price expectations. In the final section of the paper a series of fourteen hypotheses, developed either from the author's model or from previous studies, is tested through a regression analysis of strike data for American manufacturing over the 1954–75 period. The results show, among other things, that inflation has been responsible for much of the increase in strike rates experienced in manufacturing in the 1970s.

Suggested Citation

  • Bruce E. Kaufman, 1981. "Bargaining Theory, Inflation, and Cyclical Strike Activity in Manufacturing," ILR Review, Cornell University, ILR School, vol. 34(3), pages 333-355, April.
    • Handle: RePEc:sae:ilrrev:v:34:y:1981:i:3:p:333-355
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    Cited by:

    1. Perry, L. J. & Wilson, Patrick J., 2004. "Trends in work stoppages : a global perspective," ILO Working Papers 993742343402676, International Labour Organization.
    2. repec:eee:labchp:v:2:y:1986:i:c:p:1091-1137 is not listed on IDEAS
    3. Cramton, Peter C & Tracy, Joseph S, 1992. "Strikes and Holdouts in Wage Bargaining: Theory and Data," American Economic Review, American Economic Association, vol. 82(1), pages 100-121, March.
    4. Lesch, Hagen, 2002. "Streik und Arbeitskampfregeln im internationalen Vergleich," IW-Trends – Vierteljahresschrift zur empirischen Wirtschaftsforschung, Institut der deutschen Wirtschaft (IW) / German Economic Institute, vol. 29(2), pages 5-17.
    5. Ronald G. Ehrenberg & Leif Danziger & Gee San, 1982. "Cost-of-Living Adjustment Clauses in Union Contracts," NBER Working Papers 0998, National Bureau of Economic Research, Inc.
    6. repec:ilo:ilowps:374234 is not listed on IDEAS
    7. Christopher L. Erickson & Daniel J.B. Mitchell, 1996. "Information on Strikes and Union Settlements: Patterns of Coverage in a “Newspaper of Recordâ€," ILR Review, Cornell University, ILR School, vol. 49(3), pages 395-407, April.
    8. M. Rodwan Abouharb & Benjamin O. Fordham, 2020. "Trade and Strike Activity in the Postwar United States," Social Sciences, MDPI, vol. 9(11), pages 1-25, October.
    9. Lesch, Hagen, 2001. "Arbeitskämpfe im internationalen Vergleich: Trends und Einflussfaktoren," IW-Trends – Vierteljahresschrift zur empirischen Wirtschaftsforschung, Institut der deutschen Wirtschaft (IW) / German Economic Institute, vol. 28(3), pages 5-27.
    10. Stefan Houpt & Juan Carlos Rojo Cagigal, 2012. "‘You can't start a fire without a spark’: strikes and class struggle in the Basque Country, 1914-36," Working Papers 12012, Economic History Society.
    11. Borrel, Monique, 1992. "The Impact of Labor Disputes on the Fabric of French Society From 1950 to the Mid-80's0," Institute for Research on Labor and Employment, Working Paper Series qt3mq3b9wt, Institute of Industrial Relations, UC Berkeley.

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